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I agree with RatherBeGolfing - there really shouldn't be any true-up. There might be a few things that create a true-up (such as health insurance premiums for 2% s-Corp shareholders, but those are not super common). The SH nonelective can be calculated and deposited each pay period, but the final calculation should be on an annual basis. The deposit frequency can be more often than the actual annual calculation / accrual.

It generally isn't an issue for a 3% SHNEC. With match you have more variables that can cause significant differences between payroll calculations and annual calculations. If you take 3% on a payroll basis, it should add up to 3% on an annual basis. You might have penny adjustments for rounding, but that's about it. The bigger problem when doing it on a payroll basis is making sure you have a backstop for the comp limit. In other words, if they are simply doing 3% of payroll comp, make sure you have measures in place to cap it at $8,400 (3% of $280,000).

A plan that does not cover employees is not a plan subject to ERISA, but of course that is putting the rabbit in the hat and there is no need here for a dissertation on the potential adverse consequences of worker misclassification.

To me you had it in your original comment. It says comp paid while not a participant. Your description of the facts says it was paid while a participant. It doesn't say earned but paid.

What is the plan's definition of compensation in the document? If compensation is on a W-2 basis, it should be easy to explain since compensation for W-2 purposes is based on when PAID, not when earned. So partial year compensation would similarly be based on the period in which it was paid, not when the hours were actually worked.

Multiplication is associative

agree with the others that all plans i've ever seen or worked on use pay date, not earned dates. And I'm old enough to have worked on both balance forward and dailies!

$390k You can report on either cash or accrual basis as long as you are consistent. If you use cash basis then its only contributions before the end of the plan year. Using accrual basis you report contributions made on behalf of the plan year, even if they are actually deposited in the next calendar year. Most people report contributions made on behalf of the plan year because it lines up with the deductions. In this case, $3k is reported for 2018 even though the deposit was in 2019. The loan balance at the end of the plan year.

Even still, I can't see why that would be an issue? Owner takes a loan, owner loans the money to the business. There's no way to "prove" that the $50,000 that was deposited to the Plan by the corporation was sent to the plan, or if the $50,000 is still seitting in the checking account for working capital (or it it was used for last week's payroll).

the FT William document has the following language. the key point being the last NOTE yes, you can do an allocation other than annual BUT any other choice than annual (end of the year) might cause a violation of the regs. I would say that implies a possible catch-up just in case the 3% wasn't allocated over the whole year (or from date of participation) 22. Allocation of Profit Sharing Contributions a. Profit Sharing Contributions are allocated to Participant Accounts at the following time(s): i. [ X ] End of Plan Year ii. [ ] Semi-annually iii. [ ] Quarterly iv. [ ] Each calendar month v. [ ] Each pay period b. Minimum and Maximum Profit Sharing Allocations i. [ ] Allocations of Profit Sharing Contributions for a Participant shall be subject to a minimum amount: ii. [ ] Allocations of Profit Sharing Contributions for a Participant shall be subject to a maximum amount: NOTE: Any service requirements specified in D.12 through D.15 shall be applied pro rata to the period selected in this D.22a. Any last day rule specified in D.12 through D.15 shall be applied as of the end of each period selected in this D.22a. NOTE: Selection of D.22a.ii through D.22a.v may result in the Plan not meeting a Code section 401(a)(4) safe harbor allocation formula within the meaning of Treas. Reg. 1.401(a)(4)-2(b)(2).

No need to debate it again, the premise of OPs question was not whether or not you could prevent the participant from stopping payroll deductions for loan payments. The question was if you cant prevent them from stopping payroll deductions, do you have to provide them with another option for repayment. I think we can agree that the plan is under no obligation to provide an alternative repayment option.

I do not want to start this debate over again, but, subject to state law (and all the states I am familiar with are OK with this), the plan can be designed to effectively prevent an employee participant from electing to stop payroll deductions for loan payments. It is not generally done because of (1) ignorance about how to do it, which requires a sophisticated use of state law, and (2) it increases administrative burden, which the big providers are unwilling to contemplate and the sponsors (except for paternalistic compliance nuts) are unwilling to pay for directly or indirectly even if someone offered it to them. So if y'all agree to quit saying it CANNOT be done I agree to stop arguing that it in fact SHOULD be done to comply with the ERISA rules. But you don'f have to agree. This my final post on the subject because it matters to no one, least of all the regulators.

The plan/employer CANNOT withhold voluntary payroll deductions without authorization or after authorization has been withdrawn. The plan CAN dictate how loan payments are made, for example, only through payroll deduction.

His loss of coverage is a Special Enrollment event (under HIPAA Portability rules). As such, he is allowed to enroll for coverage for both himself and his spouse. There is an exception if your health plan (1) requires an employee declining coverage to state in writing the reason for declining coverage is the existence of other coverage and (2) at or before the time the employee declined coverage, the employee is provided with notice of the requirement to provide the statement (and the consequences of the employee's failure to provide the statement), and the employee does not provide the statement. In that case the employee's request to add the spouse could be refused.

Repeat: terms of the plan.

Depends on the terms of the plan, the size of the balance and the reason for the distribution.